China, Audi's single largest market, continued to power demand for the marque, boosting volumes by 24 percent last month and accounting for one out of three Audis sold worldwide.

In the first eight months of this year, Audi delivered 961,000 vehicles to customers for a gain of 12.7 percent -- putting it only 2,110 cars short of the total for the BMW brand during the same period.

That translates on average to roughly 100 cars more that BMW sells per working day.

While Audi and BMW fight it out for leadership of the premium car market, Daimler's Mercedes-Benz brand continues to lag behind its two closest rivals. Its sales rose by 5.4 percent to 841,567 cars during January to August.

Assuming their respective sales growth rates for the eight months through August stay constant, the BMW brand would still outsell Audi by some 20,000 cars this year.

Yet Audi's dominance in China and the European launch of its high volume compact, the A3 hatchback, at the end of last month could turn the tables in favour of the Ingolstadt-based unit of Volkswagen.

In a statement on Monday, Audi Chief Executive Rupert Stadler forecast sales of the new A3 over its entire lifecycle would outstrip significantly the 1.877 million sold of the previous generation.

This is of crucial importance to Volkswagen since the A3 will be one of the highest volume cars derived off its new MQB development and production architecture, which also underpins the new Golf and which should drastically reduce production costs and manufacturing time.

"New models like the A3 and the refreshed Q5 (SUV model) that also launches in the coming days, will strengthen Audi in Europe even more," said Luca de Meo, the brand's new marketing and sales chief since the beginning of the month. (Reporting By Christiaan Hetzner)